DEFINITION of 'Transaction Identifier'

A unique identifier assigned by a business to each transaction made with a debit or credit card. Transaction identifiers, also called transaction IDs, are used to help businesses identify all of the components of a transaction, from the moment a card is swiped to the moment the payment goes through.

BREAKING DOWN 'Transaction Identifier'

Business that operate online assign transaction identifiers to be able to track down information about a particular transaction in order to answer questions from customers and financial institutions. The transaction identifier is similar to the reference number assigned to transactions by banks, and which appear in a customer’s monthly financial statements. Transaction identifiers make it easier for companies to track individual transactions, including capturing the initial transaction, modifying an existing transaction, and providing refunds for a transaction.

Businesses use transaction identifiers to make the compiling and querying of large numbers of transactions easier to manage. These numbers are used both in written communications, such as a packing invoice, as well as electronic communication, such as a purchase confirmation email.

Transaction identifiers make it easier for customers to interact with customer service representatives as it allows the customer to communicate problems with a particular transaction by only having to list out a series of numbers and letters. For example, it is easier to discuss “purchase 123456” than it is to discuss the item purchased, the purchasers name, and the date of the transaction. The descriptive elements of the transaction are maintained in the metadata found in the business’ electronic database.

Businesses that operate a number of stores, such as big box retailers, can link the transaction identifier to a particular card terminal at a specific store. The business can use the transaction identifiers to determine if there are problems with a particular terminal, or if a particular employee ringing up purchases results in more merchandise returns being made to the store at a later time.

RELATED TERMS
  1. Reference Number

    A unique identifier assigned to each transaction made using a ...
  2. Authorization Only

    A type of sale transaction that creates a pending transaction ...
  3. Precedent Transaction Analysis

    A valuation method in which the prices paid for similar companies ...
  4. Inverse Transaction

    A transaction that can cancel out a forward contract that has ...
  5. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash ...
  6. Comparable Transaction

    A method of valuing a company that is for sale. Comparable transactions ...
Related Articles
  1. Tech

    Bitcoin Transactions Vs. Credit Card Transactions

    We provide an overview of the differences between bitcoin and credit card transactions, and the advantages of using one over the other.
  2. Investing

    Understanding Related-Party Transactions

    In business, a related-party transaction refers to a transaction where parties on both sides have a common interest or relationship.
  3. Managing Wealth

    How Foreign Transaction Fees Work

    Using a credit card when you travel can be costly. Here's what you need to know about foreign transaction fees – plus tips on making purchases abroad.
  4. Taxes

    What IRS Form 8949 Is For

    Selling a painting or that lake property? Disposing of your fossil fuel stocks? You need to know about this IRS form.
  5. Financial Advisor

    How Brokers Are Compensated for Selling Bonds

    Find out how brokers are paid for selling bonds and how the transaction costs are passed on to the investor through a markup or commission.
  6. Investing

    Arm's Length Transaction

    An arm’s length transaction describes business deals in which the buyer and seller act independently and with no interest in the other’s benefit.
  7. Small Business

    Best Checking Accounts For Small Businesses

    What you need to know to choose the best checking account for your small business – and where to look.
  8. Investing

    What is the Secondary Market?

    The secondary market is where investors purchase securities or assets from other investors, rather than from the issuing companies themselves.
  9. Tech

    What Is the Blockchain?

    A blockchain​ is a public ledger that records all Bitcoin​ transactions, eliminating the need for a third party to process payments.
  10. Personal Finance

    Which Are The Best Credit Cards To Take To China? (DFS)

    Credit cards are now much more widely accepted in China – and one issuer leads the pack, due to its deal with China UnionPay, the Chinese bankcard network.
RELATED FAQS
  1. Are arm's length transactions always better than transactions not at arm's length?

    Transactions not at arm's length have real tax and other consequences for individuals and businesses, but they are not necessarily ... Read Answer >>
  2. What happens when my bank account is debited?

    Understand the process that takes place when your account is debited. A debit to your account happens when you use funds ... Read Answer >>
  3. Given a good bookkeeping system, would financial accounting be necessary?

    Bookkeeping and financial accounting may seem like they are new creations, but variations have been around for millennia. ... Read Answer >>
  4. What are the differences between debit cards and credit cards?

    Learn how the major difference between a debit card and a credit card is where the money comes from when a customer makes ... Read Answer >>
Hot Definitions
  1. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents ...
  2. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
  3. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  4. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  5. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  6. Mezzanine Financing

    A hybrid of debt and equity financing that is typically used to finance the expansion of existing companies. Mezzanine financing ...
Trading Center